New York On Track To Become Next Cannabis Capital, But State Sen. Warns Not To Imitate California

The first adult-use cannabis sales in New York began on Dec. 29, nearly 20 months after former Gov. Andrew Cuomo signed recreational marijuana into law.

The state began issuing cultivation licenses to more than 200 farms last spring, and now thousands of pounds of weed, worth hundreds of millions of dollars, are ready to sell at dispensaries.

Housing Works Cannabis Co was the first to launch cannabis sales at its Manhattan-based store, Gov. Kathy Hochul said last week.

Even though the move represents a big win for cannabis shareholders and activists, New York State Senator Jeremy Cooney, who has been at the forefront of cannabis reform efforts for years, calls for more caution as the new market is poised to kick off, reported Syracuse.

“It’s important that we don’t just roll out the program haphazardly and then have to deal with the consequences,” Cooney told NY Cannabis Insider in a recent interview. “We don’t want to learn from states like California that are still struggling years after legalization.”

The senator was behind several notable cannabis reform measures, such as SB S9217, which sought to allow the Cannabis Control Board to license “personal cultivation facilities” for adults who can’t grow cannabis at home and a bill that would allow transgender and non-binary people to qualify as social equity applicants under the state’s cannabis law. He was also one of the key figures in the process of crafting and passing the Marijuana Regulation and Taxation Act.

How To Stop Illicit Cannabis Sales?

Now, Cooney wants to address possible downsides of the reform that’s already in motion. To that end, he pointed out that the state’s illegal marijuana market, which is thriving, is both public safety and public health issue.

“People are walking into unlicensed retail distribution centers, picking up products, and buying products that are not being tracked, and have not been tested for safety,” he said. “That’s a real concern.”

Cooney proposes restricting the ability to obtain a full license for those caught running an unlicensed shop.

“Maybe some violations should inhibit their ability to get a full license. I think that’d be pretty big,“ he continued. “If you’re interested in getting involved with the industry, it’s a pretty big financial loss if you’re not eligible to get the ultimate license.”

Gov. Hochul has a different approach to the issue. She recently unveiled a “New York State Licensed Cannabis Dispensary” verification tool that would assure consumers that the products they purchase are safe and legal.

It will be posted in the front windows of stores run by legally licensed retailers, including 36 recently approved cannabis dispensary licensees.

More Collaborative Partnerships To Adress Demand

Cooney also talked about ways of addressing the huge demand for cannabis.

“We have to recognize that there is a great demand, so we need to do more collaborative partnerships,” he said. “That could include Registered Organizations – medical operators – and also include indoor grow opportunities. We have to be more holistic instead of checking one box here and one box there.”

New York legalized medical marijuana in 2014, capping the number of operators at 10, which include publicly traded cannabis companies Columbia Care Inc CCHWF, Curaleaf Holdings Inc CURLF, MedMen Enterprises Inc. MMEN MMNFF, Acreage Holdings, Inc ACRDF, Cresco Labs Inc CRLBF, Vireo Health International, Inc. VREO VREOF, Green Thumb Industries Inc. GTBIF GTII, and iAnthus Capital Holdings, Inc. ITHUF IAN as well as two private operators, PharmaCann and Etain Health.

Consolidation Phase?

Interestingly, the two medical marijuana giants, Cresco and Columbia Care are negotiating to merge.

The $2.1 billion deal was announced in March and is expected to give Cresco the largest annualized Pro-forma revenue in cannabis at over $1.3 billion and a strategic and broad footprint comprising 18 states.

The companies recently signed definitive agreements to divest certain New York, Illinois and Massachusetts assets to an entity owned and controlled by Sean “Diddy” Combs. The divestiture of the assets is required for the closing of the Cresco and Columbia Care merger.

Cantor Fitzgerald’s analyst Pablo Zuanic recently said that the deal could be wrapped up by the end of 1Q23.

Photo: Courtesy of Kindel Media by Pixabay and Quintin Gellar by Pexels